Abstract
This paper examines the comparative statics properties of multicommunity models in which perfect sorting is not obtained because the number of types of individuals is greater than the number of communities. In general, equilibrium is inefficient and policy interventions can be Pareto improving. The paper shows that the welfare effects of a given policy depend critically on whether the number of communities is odd or even. The same policy intervention that is Pareto improving for an even number of communities can make all worse off if the number of communities is odd.
Original language | English (US) |
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Pages (from-to) | 177-192 |
Number of pages | 16 |
Journal | Journal of Public Economics |
Volume | 65 |
Issue number | 2 |
DOIs | |
State | Published - Aug 1997 |
Keywords
- Multicommunity models
- Odd versus even
- Tiebout
ASJC Scopus subject areas
- Finance
- Economics and Econometrics